1 / 14

Value Chains

Value Chains. Yale Braunstein June 2004 . Agenda. What are Value Chains? The Theory of the Firm Market vs. Hierarchies Redesigning the Value Chain Learning Curves. I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves. Value Chain.

alaqua
Télécharger la présentation

Value Chains

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Value Chains Yale BraunsteinJune 2004

  2. Agenda • What are Value Chains? • The Theory of the Firm • Market vs. Hierarchies • Redesigning the Value Chain • Learning Curves I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves

  3. Value Chain • - a linked set of value creating activities • from raw material to end use product I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Customer Procurement R&D Manufacturing Marketing Distribution Service Value chain Customer Basis Source: Marius Leibold, Gibert J. B. Probst & Michael Gibbert

  4. Vertical Integration natural gas • - the process that links the aquisition of raw material to the sale of the finished product • common parent owns more than one part of the chain • examples: • Oil companies • Fast-food cartons • (tapered v.i.) Ethane Styrene I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Polystyrene Cartons Fast-food restaurants final customer Source: Ernst Maug

  5. Upstream vs. Downstream • - a company that produces its own inputs: • is vertically integrated in the upstream market, • has engaged in backward integration • a company that distributes and markets its own goods • is vertically integrated in the downstream market • has engaged in forward integration • Firms that are not vertically integrated use the market • can contracts replace vertical integration? I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Ernst Maug

  6. The Theory of the Firm Transaction costs approach (Coase): costs providing through the market costs providing from within the firm I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Market‘s costs: negotiations, search and information, policing and enforcement Firm‘s costs: own production, r&d, marketing

  7. Markets vs. Hierarchies Make or buy: • Benefits from outsourcing • Economies of scale of • supplier • 2. Economies of Scope of Supplier • 3. Descipline on the market reduces agency costs • 4. Inefficiencies hidden in the house of department • Costs of outsourcing • Coordination along the vertical chain • 2. Leakage of critical information • 3. Transaction costs I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Ernst Maug

  8. Specialization • Specialization in the vertical chain: • often small firms • knowledge benefits for them • Result: Advantage in competition • Negative: • - may be spread to thin if production in chain grows I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Ernst Maug

  9. Redesign of the Value Chain • Redesign must create dramatic gains in: • cost structure • asset investment • speed of responsiveness to external changes • What has to be redesigned?: • set of activities • the interfaces across the chain I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Marius Leibold, Gibert J. B. Probst & Michael Gibbert

  10. Knowledge and Redesign • Redesign should lead to knowledge about : • the customer base • technologies • market • Redesign: • merges the knowledge of several firms I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Marius Leibold, Gibert J. B. Probst & Michael Gibbert

  11. Learning by doing • reduces costs by acquiring more know-how • through production • Learn about • consumer tastes • operating aquipment and technological rules • organizational processes • Learning can manifests itself in • higher quality • lower costs • better marketing Learning Curves I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Source: Ernst Maug

  12. Learning curves and economies of scale • Related, but not always the same • Role of time and volume Learning Curves / EoS Average Costs ($/unit) Average Costs ($/unit) I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves AC1 AC1 AC2 AC2 Q 2Q Cumulative Output Annual Output Source: Ernst Maug

  13. Learning Curves and Strategy Learning Curves / Strategy Product Life Cycle I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves Introduction Growth Maturity Decline Source: Ernst Maug

  14. The BCG/McKinsey Matrix Learning Curves / Strategy Relative Market Share Relative Market Growth High Low I. Agenda 1. Value Chains? 2. Theory of Firm 3. Market/Hierarchy 4. Redesign 5. Learning Curves High Rising Star Problem Child Low Cash Cow Dog • Idea: Leverage learning economies by increasing • capacity early in the life cycle • use cash cows to fund: Problem Child, Rising Star • devest dogs Source: Ernst Maug

More Related